The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Wednesday, 30 June 2010

Some IP blogs

A couple of times each year, the IPKat -- together with Merpel, the AmeriKat and Tufty -- reminds readers about some of the intellectual property-flavoured weblogs in which one or more members of the IPKat team participate. That time has come round again, so here we go ...

* The 1709 Blog caters for the copyright enthusiast. With input from a panel of bloggers drawn from various corners of the copyright world, coverage of all aspects of copyright law and practice is rich and varied (

* PatLit tackles patent dispute resolution topics, not just from the UK but from the US, Europe and wherever interesting news and comments emerge ( nb: This blog is looking to recruit more contributors, ideally drawn from Germany, Japan, The Netherlands and other patent-litigation-rich jurisdictions. If you'd like to be considered and can write in English really well, email Jeremy here.

* IP Finance touches that delicate interface between intellectual property and the world of finance, addressing securitisation, valuation, royalty rates, assessment of damages and the evolution of new business plans (

* Class 46, founded by friends of the MARQUES organisation and driven by a 10-strong team, this blog delivers trade mark and brand-related news and developments from across Europe (

* Class 99 -- which is unconnected with Class 46 -- is dedicated to design law and practice in the UK, in Europe and beyond. It is written by a team of experts in the field (

* jiplp is the blog of Oxford University Press monthly, The Journal of Intellectual Property Law and Practice (JIPLP). Each month it publishes some of the journal's Current Intelligence features, together with news and other journal-related issues (

* Two regional weblogs also cover IP activity. First comes Afro-IP (, which deals with the IP scene in Africa, while IP Tango ( does the same for Latin America.
IPKat team blogger Jeremy is also involved in the smooth running of a blog which which is supported by law firm Olswang LLP, where he is IP consultant:
* The SPC Blog, a handy information source for anyone who is involved in the tiny world of supplementary protection certificates. This blog has also hosted two annual seminars on the subject (
The blogs listed above are open to all readers, do not carry advertisements and may be enjoyed via email subscription or RSS feed.

The IPKat is happy to draw the attention of his readers to the launch of any new IP weblog, whether he and his friends write for it or not. IP blog events are generally mentioned in his Monday Miscellany, Wednesday Whimsies and Friday Fantasies features.

Wednesday whimsies

Around the blogs. The sharp-eyed Hugo Cox has drawn my attention to a Danish IP weblog, Innovationpartners (subtitle: a weblog about IP and innovation), masterminded by Kristian E. Beyer (now with Frederiksberg Forsyning A/S, but whose previous convictions have resulted in his serving time with Deloitte Business Consulting, the Danish Patent and Trade Mark Office and the Ministry of Science. Not yet an IP blog, but with the hope that it will be when the opportunities to post on IP matters arise, is the Wardblawg, from Scottish lawyer Gavin Ward. Gavin, it should be noted with gratitude, is one of that noble legion of readers whose cat-photos grace this blog from time to time. His owner, Missy, appears on the right. And here's a quick suggestion for design lovers: if you think that Italian design is really cool -- all sweeping lines and dashing style -- you'll be surprised to discover what a junky, clunky thing Italian design law is, as Class 99 explains an ongoing Italian design horror, which has spread as far as the European Court of Justice in Luxembourg, here. Bilski-ites will enjoy Gena Mason's neatly-presented, clearly thought-out summary on PatLit here.

The IPKat's opinions concerning the wisdom of marketing invention by reference to Wallace and Gromit are well known and none-too-enthusiastic. However, he would never wish to hurt the feelings of (i) small, innocent children with inventive ideas or (ii) public sector employees at a time of spending cuts. Accordingly he warmly welcomes the chance to attend the Intellectual Property Office-backed Cracking Ideas initiative. Part of this educational process is the Cracking Ideas Award Ceremony, which takes place next Wednesday 7 July, in Legoland (this country does not appear to be a signatory to the Paris Convention or TRIPS, though it is firmly committed to IP protection). Cracking Ideas seeks to teach children that innovation and creativity can be fun, that ideas have value if protected by IP and also to respect other people's IP. The awards are given to children in three age categories (4 - 7, 8 - 11 and 12 - 16). The IPKat will be reporting, so watch this space ...

While on the subject of children, spare a thought for McDonald's. Having gone to great lengths to persuade the world of its recent commitment to healthy eating and its environmentally green credentials, the fast food empire must now defend its McNuggets from the claim that this child-friendly product contains the same chemical as Silly Putty, anti-foaming agent dimethylpolysiloxane. The IPKat is a little puzzled by this, since his chickens have never foamed in the first place. McNuggets are also said to contain butylhydroquinone, an ingredient which is particularly dangerous for people with poor spelling.

Some folk are getting very animated about the upcoming International Federation of Reproduction Rights Organisations (IFRRO) Conference, which international reproducers from over 50 nations are expected to attend. In anticipation of the great event, here's a link to an article in Publishers Weekly by Tracey Armstrong, CEO of Copyright Clearance Center (an IFRRO founder member) which touches on such boring and mundane topics as the Google Settlement, Apple iPads and IP issues in the digital age.

The IPKat has been taking a look at two books that aren't about IP, and don't even have IP in their titles, but which have plenty of relevance and importance to intellectual property protection and exploitation. The first is George Kimball's Outsourcing Agreements: a practical guide, published earlier this year by Oxford University Press (webpage here). The author, who heads the global IT/communications practice at Baker & Mackenzie LLP, covers all sorts of different aspects of IP that should be appropriately covered by an outsourcing agreement -- and there are many such aspects. The second, coincidentally published by the same company, is US Antitrust Law and Enforcement: a practice introduction, by Douglas Broder (co-chair, global antitrust, K & L Gates LLP). The connection between IP and antitrust is too well-known to adumbrate here, but familiarity with the problems is no automatic path to knowing what to do about them in practice -- which is why this book is so attractive. This title's webpage is here.

Tuesday, 29 June 2010

Archiving online citations: are we all Americans now?

As an occasional academic himself, the IPKat takes great interest in the issue raised in the following request for information from his friend Susan Hall (Cobbetts), who writes to him as follows:

"As citing online sources in academic papers becomes more acceptable, one issue which is becoming more important is the fragile nature of online materials and the obvious concern when reviewing or answering papers which cite online sources, that such sources remain accessible for verification and follow-up. A tool called WebCite, offered here, purports to offer an answer, allowing people who cite online sources to cache them on the WebCite servers, on the terms set out on the site in question.

However, this seems to produce a number of interesting IP implications on both sides of the Atlantic (incidentally, the examples of archiving of site uses are drawn from the Guardian).

The advertised service appears intended to protect people using online sources in academic research from dead links and future take-downs, but there seem difficulties fitting the WebCite model into a UK copyright framework. Further, although the WebCite FAQs put forward a justification based on fair use under US law, this is itself not devoid of problems:

"Caching and archiving webpages is widely done (e.g. by Google, Internet Archive etc.), and is not considered a copyright infringement, as long as the copyright owner has the ability to remove the archived material and to opt out. WebCite® honors robot exclusion standards, as well as no-cache and no-archive tags. Please contact us if you are the copyright owner of an archived webpage which you want to have removed".
A U.S. court has recently (Jan 19th, 2006) ruled that caching does not constitute a copyright violation, because of fair use and an implied license (Field vs Google, US District Court, District of Nevada, CV-S-04-0413-RCJ-LRL, see also news article on Government Technology). Implied license refers to the industry standards mentioned above: If the copyright holder does not use any no-archive tags and robot exclusion standards to prevent caching, WebCite® can (as Google does) assume that a license to archive has been granted. Fair use is even more obvious in the case of WebCite® than for Google, as Google uses a “shotgun” approach, whereas WebCite® archives selectively only material that is relevant for scholarly work. Fair use is therefore justifiable based on the fair-use principles of purpose (caching constitutes transformative and socially valuable use for the purposes of archiving, in the case of WebCite® also specifically for academic research), the nature of the cached material (previously made available for free on the Internet, in the case of WebCite® also mainly scholarly material), amount and substantiality (in the case of WebCite® only cited webpages, rarely entire websites), and effect of the use on the potential market for or value of the copyrighted work (in the case of Google it was ruled that there is no economic effect, the same is true for WebCite®)." (FAQs)
Asks Susan, "Is anyone doing any work on archiving of online sources and the legal issues entailed?" If so, she -- and, out of sheer curiosity, the IPKat -- would love to know.

Monday, 28 June 2010

Machine-or-transformation? Bilski court speaks!

At last, the Supreme Court's long-awaited ruling on the standard of patentability of business method software patents in In re Bilski has been handed down (you can read it in full here). It's a 71-page decision and the IPKat can't pretend to have read it all: comments and analysis will come later. According to the headnote:

"Petitioners’ patent application seeks protection for a claimed invention that explains how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. The key claims are claim 1, which describes a series of steps instructing how to hedge risk, and claim 4, which places the claim 1 concept into a simple mathematical formula. The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand. The patent examiner rejected the application on the grounds that the invention is not implemented on a specific apparatus, merely manipulates an abstract idea, and solves a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The Federal Circuit, in turn, affirmed. The en banc court rejected its prior test for determining whether a claimed invention was a patentable “process” under Patent Act, 35 U. S. C. §101—i.e., whether the invention produced a “useful, concrete, and tangible result,” see, e.g., State Street Bank & Trust Co v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373—holding instead that a claimed process is patent eligible if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a differentstate or thing. Concluding that this “machine-or-transformation test” is the sole test for determining patent eligibility of a “process” under §101, the court applied the test and held that the application was not patent eligible.

Held: The judgment is affirmed".
In addition to the main judgment, delivered by Justice Kennedy, a number of additional concurring judgments were delivered. Justice Kennedy's concluding comments are worthy of note:
"Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr. And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text. The judgment of the Court of Appeals is affirmed".
Wikipedia on Bilski here
Patently-O's pre-Bilski software patent survey here
Coroporate Counsel: the waiting was the hardest part here
The European position on software patents here (if you're European), and here (if you're British)
Non-patentable business methods here and here
Bilski Brothers recipe for OK Bilski Chili and Beans here
Bilski gets a grilling from the bar here

Department of literary and cultural allusions
Features entitled "Waiting for Bilski" on the assumption that it was an original idea to do so here, here, here, here and here (there are more ...)
"Mr Bilski Goes to Washington" here
"Groundhogs Day: speculating on no Bilski decision this term" here

United States Supreme Court
Supreme Court website here
The Supremes here
Scotus weblog here

Does a "reverse-Edwards" strangle priority?

The title of this item might seem a little curious, but not to any patent-hounds who have been sniffing at the Kat's recent posts here and here. The following is a little piece by the IPKat's valued friend and colleague, European patent attorney Kevin Cordina (Olswang LLP), who writes:

"In Edwards Lifesciences AG v Cook Biotech Incorporated a US priority application was filed in the name of three inventors, with the rights from one of those inventors passing to Cook. Subsequently a PCT application was filed by Cook alone, and the Court was asked to decide whether Cook was entitled to claim priority. Kitchin J found here that Cook was not entitled because the "person" referred to by the Paris Convention is a reference to all three applicants together, and Cook alone (or the inventor from which they acquired their rights) had not duly filed an application within the meaning of Article 4A(1) of the Paris Convention. That is, the priority right lay with the three inventors (or their successors in title) jointly, and not separately. The judgement from the Court of Appeal in this case has just been issued, but they did not consider the priority-related parts of the judgement as they found the patent obvious regardless of the actual priority date.

The obvious question then arises - what about a "reverse-Edwards" situation? If a priority application is filed by one party, can a subsequent application in the name of that party, and at least one other party, validly claim priority from it? We now have the answer to this question in the form of KCI Licensing v Smith and Nephew Inc, a judgment recently handed down by Arnold J (here, noted by the IPKat here).

In this case a US provisional application was filed in the name of the inventor, with KCI being the successor in title. Arnold J had to consider two scenarios with regard to the applicant for the subsequently filed PCT application; either KCI alone was the applicant, or KCI and a second party, Mediscus, were applicant. The first of these is uncontentious, but the second is the reverse-Edwards situation in which there are more applicants for the later application than are entitled to the priority application.

Both parties accepted that there can be an assignment of priority rights before filing the later application, which would permit the later filing in joint names with a valid priority claim. There was no evidence of any assignment in this case, but KCI Licensing argued that KCI had agreed by its conduct in naming both parties as applicants to transfer part of its entitlement to the invention to Mediscus and that this was sufficient to make Mediscus a successor in title for the purposes of claiming priority. Arnold J accepted this submission and therefore found that a PCT application in the name of KCI & Mediscus was entitled to claim priority from an application to which only KCI were entitled.

The combination of Edwards and KCI Licensing seems to wrap up most combinations of priority claim challenges related to applicants and entitlement. We now know that it is the filing date of the later application that is definitive for determining entitlement, and that this cannot be fixed later, that all parties that own the invention of a priority application at the date of filing a later application must be named as applicants on that later application, and that a later application can include more applicants than are owners of the priority application at the filing date of the later application".
This seems a helpful and tidy summary of the position. Thanks, Kevin, for taking the trouble to write in.

An entirely different reverse Edwards here
Reverse Nelson here

The heart of the matter

It's always a little disappointing when you hope that an appeal will be decided on one ground and find that it can comfortably be disposed of on quite another one. That's what happened in Edwards Lifesciences AG v Cook Biotech Inc. A year ago (here), Mr Justice Kitchin heard a dispute over Cook's European patent (UK) 1255510, “stent” valves”, for an artificial heart valve within a radially expandable stent which can be delivered through a catheter. Edwards applied to have the patent revoked, while Cook counterclaimed for infringement. The main issue at the trial --apart from a couple of minor feeble arguments about insufficiency and added matter -- was whether the patent was novel and inventive over a succession of cited documents. According to the judge, the patent as a whole was obvious in light of one of these documents, which had been published before the priority date of the patent. The judge then considered the effect of a further document, this being a scientific paper published between the claimed priority date and the application date of the patent -- which would only be relevant if the priority claim was invalid. The application from which priority was claimed was a US provisional, filed in the names of three inventors, of whom only one was employed by Cook Biotech at the time. A PCT application was then filed one year later, in the name of Cook Biotech. The other two inventors' rights were not assigned to Cook until substantially later, after the PCT application entered the European regional phase. According to Edwards, Cook had not derived the right to claim priority because, at the time the application was made, the right had not been assigned to it: Cook was therefore only successor in title for one inventor, via a contract of employment.

Citing sections 5 and 7 of the UK Patents Act 1977, Article 8 of the Patent Co-operation Treaty and Article 4 of the Paris Convention (which section 5 is intended to put into effect in the UK), Kitchin J came to the logical conclusion (at para.95 of his judgment) that the effect was clear:

"A person who files a patent application for an invention is afforded the privilege of claiming priority only if he himself filed the earlier application from which priority is claimed or if he is the successor in title to the person who filed that earlier application. If he is neither the person who filed the earlier application nor his successor in title then he is denied the privilege. Moreover, his position is not improved if he subsequently acquires title to the invention. It remains the case that he was not entitled to the privilege when he filed the later application and made his claim. Any other interpretation would introduce uncertainty and the risk of unfairness to third parties ..."
The scientific paper was therefore prior art, which would thus render some of the claims invalid for lacking an inventive step over it. Cook appealed.

This morning, in [2010] EWCA Civ 718, a three-man Court of Appeal (Lords Justice Jacob, Moore-Bick and Etherton -- who read the judgment of the Court) dismissed the appeal. Sadly, while the appeal was based on a number of grounds, its dismissal on grounds relating to claim construction made it unnecessary to revisit the issue of "who can claim priority". Discerning readers will however note that this issue also lay at the heart of last week's Patents Court ruling of Mr Justice Arnold in KCI Licensing Inc and others v Smith and Nephew plc and others [2010] EWHC 1487 (Pat), noted here by the IPKat. This is obviously an up-and-coming subject, of which we shall doubtless hear more in the near future.

Artificial hearts here
Anyone who had a heart here
In need of a heart here
Braveheart hear
Lionheart here
Cat heart hear

Monday miscellany

Today is rumoured to be National Bilski Day in the United States (if you've never heard of Bernard L. Bilski or the patent application that bears his name, click here). The decision of the United States Supreme Court has been promised and/or predicted for June 2010 -- and days are running out fast. The IPKat expects that every patent-flavoured weblog is going to be reporting on this decision, which will have business method patent enthusiasts carefully reading every line, not to mention the spaces between the lines.

Right: Rand A Warsaw, joint inventor of the energy-risk hedging patent with Bernard L. Bilski, and a victim of Back-end Alphabet Syndrome. If his name was Rand A. Aardvark, would we be waiting for In re Aardvark -- and would no-one ever have heard of Bilski?

Readers' objectives will range from (i) trying to understand what the decision means per se, (ii) what it means for business method patents already granted and for application for them which are in the pipeline and (iii) repackaging the court's message into a client-friendly format to (iv) imposing their own preferences upon the court's words in order to bend their decision to their own ends. The IPKat will no doubt have a word or two, so watch this space ...

From Euroalert comes news of fresh proposals to encourage cross-border e-trading by building consumer trust. These proposals, which have been approved by the Internal Market Committee of the European Parliament, include the establishment of a European trust label "to guarantee the reliability and quality of goods placed on the cross-border electronic market and encourage consumers to buy in this market". The IPKat looks forward to seeing what the European trust label is going to look like. Merpel wonders whether consumers will trust it as a matter of blind faith, or whether the "trust" element of the trust label is something which the Commission will have to earn.

Most of us have now heard rather more about vuvuzelas than we ever wanted to. But here's a post -- in the original Bulgarian -- from the IPKat's friend and fellow blogger Ventsi Stoilov on the protectability of the vuvuzela as a registered trade mark. In short, in 2004 a South African company registered the Community trade mark VUVUZELA (no.004 140 075) for goods in Classes 15 and 28, while a German company registered a word-and-image Community mark Vuvuzela (no.008404741) for goods and services in Classes 15, 25, 28, 35 and 41. There's also an application by a German company for international registration of VUVUZELA (no.1040869) for food. Says the IPKat, given the fact that vuvuzelas are reckoned to be noxious noise-makers (see typical consumer reactions here, here and, if you forgive the misplaced apostrophe, here), one wonders whether the association of goods or services with the v-word is a sort of aversion therapy. Merpel's not so sure: the fact that something is annoying doesn't mean that it doesn't have positive brand value too. Remember Crazy Frog.

While the IPKat is a great admirer of the Intellectual Property Office in the UK, he is also a great believer -- particularly after years of dealing with lawyers and students doing exams -- that questions should be answered as clearly and directly as possible. Here's a request for information under the Freedom of Information Act from the IPO concerning its top earners, together with an entirely correct but largely uninformative response. Why, the Kat wonders, couldn't the Office just answer the questions? What do readers think?

Sunday, 27 June 2010

Letter from AmeriKat: Urban Outfitters v BCBG - An 'exceptional case'

Last Monday the AmeriKat attended the London Citizens' Greener Planet Action Team and Oragnico's free screening of the Oscar-nominated documentary, Food Inc., as part of their initial launch of their noble new program on food waste, Plan Zheroes (Note: there is a logo competition for anyone interested!). The initiative is to provide and increase access to food that would otherwise be thrown away to the thousands of Londoners (some of whom may even may be your next door neighbors) suffering from food poverty - an initiative she urges many to get involved in. The AmeriKat suggests that if you have not seen Food, Inc., you must. Although intellectual property and media lawyers come off the worse for wear (i.e., Monsanto's patent wars and food libel laws), it is an eye-opening film that Patrick Holden (director of the Soil Association), told the audience he had seen 7 times. The AmeriKat, although not a general fan of chickens when alive given her Kat tendencies, is now after watching the film taking an extra 30 minutes in Waitrose determining where the chickens came from before they ended up in her food bowl. (picture, top left - the closest the AmeriKat will ever be to being chicken)

"Do you have no sense of decency, sir?" - BCBG attorneys ask on award of costs

Someone who was also determining where something came from, this time in the field of costs, was Judge Michael Baylson of the US District Court of Pennsylvania who two weeks ago awarded the youthful lifestyle store, Urban Outfitters, $5,000 in sanctions in addition to $1.34 million in lawyers' fees in the company's trade mark suit against BCBG Max Azria. In making the award, the Judge held that BCBG's conduct during trial dragged the litigation out for far too long. In 2006, Urban Outfitters alleged that BCBG had infringed its mark "FREE PEOPLE" by their use of "TRUE PEOPLE". The FREE PEOPLE mark had been used by Urban Outfitters since 1970. In 2007, the district court granted Urban Outfitters a permanent injunction against BCBG. A district appeals court then upheld the lower court's finding last year and dismissed BCBG's attempt to cancel Outfitter's mark.

The case was remanded back to the lower court for the judge to determine whether this was an 'exceptional case' where attorney's fees should be awarded. Readers may know, that in the US the general principle is that each party bears its own costs. However, section 1117(a)(3) of the Lanham Act provides an exception that states that the "court in exceptional cases may award reasonable attorney fees to the prevailing party." 'Exceptional cases' is not defined in the statute but the various US Circuits have developed tests of when a case is exceptional, usually with benchmarks such as the defendant's wilful infringement coupled with pre-trial or trial bad faith conduct, blatant wilful trade mark infringement or fraudulent litigation conduct.

With the defendant's liability already decided and the case remanded back, the case turned to one only of costs, with Urban Outfitters requesting sanctions following their attorneys Drinker Biddle alleging that BCBG's key witnesses made misrepresentations to the court, referring to "BCBG's chicanery", and alleging general "litigation misconduct" by the other side. Judge Baylson attempted to find a half-way approach by finding one BCBG executive witness was not credible, but that this was not the fault of BCBG's lawyers. Because of this limited finding of misconduct, he therefore awarded Urban Outfitters half of its fees and costs in the substantive litigation but did not award any costs for the appeal. The judge wrote:
"The advocacy of counsel in this case on both sides was at a high level, both in terms of legal work and vocal exuberance. The record will disclose numerous verbal attacks by the lawyers on each other as well as on their parties' positions....It may be fairly said that some of the conduct described above constitutes 'litigation misconduct,' [but] the court does not find that any of defendants' trial counsel acted improperly or unethically."
But BCBG lawyers protested some more arguing that Drinker Biddle's fees should be disallowed due to their own misconduct. Drinker then asked Judge Baylson to sanction BCBG for making this protest in bad faith with an award of its fees for the post-remand stage of the litigation. If you are like the AmeriKat and are a fan of amusing legal filings, then she suggests you read this 15-page gem from BCBG's attorneys, Pepper Hamilton. Not only does it start from the famous quote from Joseph Welch to Senator McCarthy it then starts to list the various Amendments that Dinker Biddle are alleged to be disregarding in their applications for costs - 5th, 14th and wait for it, the 1st! An entertaining read although it may be, the Judge was not amused and criticized the response for it not actually responding to Drinker's fee request.

Surely having enough of the dramatic antics of counsel, over a week ago Judge Baylson ordered that that Drinker's full attorney fee request be awarded plus the additional $5,000 for the most recent costs round. He stated:
"The court finds that the non-responsive and previously rejected arguments made again by defendants [have] extended this litigation unduly, caused the court to spend time on irrelevant matters, and warrant an additional sanction against defendants."

But it may not be over. According to Forbes, M. Kelly Tillery of Pepper Hamilton, BCBG's law firm stated:

“With respect, the judge just got it wrong. It happens. That's why there is a court of appeals.”

This case is a good lesson that in a trade mark battle the fun does not always stop at the determination of the substantive legal merits. With the somewhat increasing trend of courts awarding the other side's costs in 'exceptional cases' (both trade mark and patent alike), litigation misconduct and defendant's applications made in bad faith are to be avoided at all costs. That, and try not to annoy the judge too much with litigation antics otherwise you may find yourself in BCBG's position and see your bill for the other side's costs double.

Other news update: For weekly readers, the AmeriKat wrote about the biggest US news of the week on Thursday in the Viacom and Premier League v Google/Youtube litigation here, which saw Judge Stanton award summary judgment in favor of Google. The AmeriKat is also expecting Bilski tomorrow (but don't hold your breath).

Negative pressure, positive outcome

Negative pressure, positive outcome. While the rest of the world has its eyes trained on the United States, desperately seeking first sight of In re Bilski, patent litigation is still taking place elsewhere, as is evidenced by last week's carefully-framed decision in KCI Licensing Inc and others v Smith and Nephew plc and others [2010] EWHC 1487 (Pat), a ruling of Mr Justice Arnold (Patents Court for England and Wales).

Right: the IPKat is all in favour of dressings that don't press on his ears

This case, the second to be brought by KCI against Smith & Nephew (S & N) in respect of its negative pressure wound therapy (NPWT) apparatus, involved patents for improved apparatus for use in NPWT. This remarkable therapy, pioneered by two researchers at Wake Forest University), was the subject of an international patent application by the university, referred to in these proceedings as Argenta -- the name of the research team leader. Argenta led to the subsequent grant of a family of patents, for which KCI was the exclusive licensee.

According to KCI, S & N, through their own NPWT apparatus, infringed two members of the university's patent family: 'Wound drainage equipment' (referred to as 504) and 'Wound drainage canister' (950). 950 was a divisional of 504, both sharing the same priority date. Claim 5 of 504 related to reticulated foam, a process by which a very open-celled foam could be made by removing most of the cell walls so that only a net-like structure remained; it also disclosed apparatus for use in the technique described in Argenta, the principal feature of which was that it comprised a removable and disposable canister for collecting fluids sucked from the wound.

The specification of 950 was identical to that of 504. Claim 7 of 904 stated that "[the canister] includes a gel-forming substance which is capable of immobilising drainage fluids within the canister". The priority document, relied on by KCI, was a US patent application which named one Lina as the sole inventor of the invention, for which he was the sole applicant. He had signed a confidentiality agreement, paragraph 3 of which provided that
"I hereby assign and agree to assign to the Company [KCI] all right, title and interest in all confidential information, inventions and improvements conceived or developed by me, alone or in conjunction with others, during my employment and for a period of three (3) years after termination for whatever reason, which relate to any phase of the Company's business".
S & N denied infringement of 504 and 950, also counterclaiming for revocation of both patents, mainly on the ground of lack of inventive step in light of Argenta, the difference between Claim 5 and Argenta being that Claim 5 required the use of a reticulated foam.

KCI called two experts, one of whom gave evidence that gel-forming substances were not common general knowledge among design engineers with experience of designing medical devices, the other showing that the clinician forming part of the skilled team would have approached implementing Argenta with scepticism.

Issues arose as to, inter alia, whether KCI had the right to claim priority under s 7(2) of the Patents Act 1977 (the Act) at the date of filing the application by virtue of the confidentiality agreement. Under s.7,
"…(2) A patent for an invention may be granted (a) primarily to the inventor or joint inventors; (b) in preference to the foregoing, to any person or persons who, by virtue of any enactment or rule of law, or any foreign law or treaty or international convention, or by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it (other than equitable interests) in the United Kingdom;
(c) in any event, to the successor or successors in title of any person or persons mentioned in paragraph (a) or (b) above or any person so mentioned and the successor or successors in title of another person so mentioned…".
The court had to consider (i) whether paragraph 3 was effective to assign Lina's interest in the invention to KCI, (ii) whether it would be obvious to a skilled team to select a reticulated foam for use as the dressing, thus constructing apparatus falling within claim 5, (iii) whether it would be obvious to devise a canister falling within Claim 7, or to include within the canister a gel-forming substance which was capable of immobilising drainage fluids and (iv) whether S & N had infringed claim 5 of 504 as suppliers of essential parts for infringing purposes by selling certain pumps and canisters

Arnold J held the disputed patents valid and infringed. In his view
*it was clear from the Patents Act 1977 s.7(2) that a patentable invention was "property" and that the inventor was the first owner of that property unless one of the circumstances mentioned in s.7(2)(b) applied;

* if s.7(2)(b) did apply, so that another person was entitled to the whole of the property in the invention before it was made, that other person was then entitled to apply for and be granted a patent, and if the inventor assigned the property in the invention to another person after making it, that other person became entitled to apply for and be granted a patent by virtue of s.7(2)(c);

* this being so, paragraph 3 of the agreement with Lina was effective to assign legal title to the invention to KCI, which was his successor in title at the date of application, and the patents were entitled to the claimed priority date;

* even if information was not disclosed by a specific item of prior art and was not common general knowledge, it might nevertheless be taken into account as part of a case of obviousness if it could be proved that the skilled person, faced with the problem to which the patent was addressed, would acquire that information as a matter of routine;

* here there was no evidence that the design engineer would, as a matter of routine, carry out a search which would lead him to reticulated foam. Accordingly, it was not obvious to employ reticulated foam as the dressing for use in NPWT apparatus;

* once it is accepted gel-forming substances were not common general knowledge, it follows that it would not have been obvious to use such a substance to solve that problem;

* with regard to secondary infringement, where it is alleged the defendant supplied a means by which a patented invention is put into effect, the Patents Act 1977, s.60(2) made it clear that there could be infringement not merely if the supplier had known that the means were intended to put the invention into effect, but also if that would be obvious to a reasonable person in the circumstances -- the relevant intention had to be that of the person supplied. In the circumstances, some of the canister sales infringed that provision, while others did not.
Says the IPKat, in reaching his decision on the s.7(2) point, the judge found support (at para.70) from a decision of the European Patent Office's Legal Board of Appeal in Case J19/87 Burr-Brown /Assignment [1988] EPOR 350 to the effect that
"I... an assignment of an invention and a patent application from A to B with a covenant of further assurance was sufficient to entitle B to claim priority from an application filed by A even though the assignment of the patent application was ineffective because it was not signed by B contrary to section 30(6) of the 1977 Act as it then stood. In holding that the priority claim was a good one, the Board ... accepted an opinion from English counsel ... that (i) the assignment of the invention (which post-dated the making of the invention) was effective in law even though the assignment of the patent application was not, and (ii) although the assignment was ineffective in law B had acquired an equitable interest in the patent application which was a proprietorial interest. Although it could well be argued that point (i) was enough, the Board seems to have regarded point (ii) as significant as well".
More on negative pressure here
How to bandage a cat here

Friday, 25 June 2010

Creative Stars and Video Games: John Grisham or John Doe?

Is there a star aspect to the video games industry? If so, who, or what, exactly is the star and what it its role? These questions came to me in reading a recent account of a legal battle that has arisen at the highest levels of that industry ("Did Activision Just Frag Itself?", April 26-May 3 issue of Bloomberg Business Week). This, in light of various reports that the industry is in a bit of a funk as it looks to reinvigorate itself in a current world of few megahits.

The article describes the battle between Bobby Kotick, the CEO of Activision, the giant of the video games business (and a member of the Vivendi stable of companies), and two of the company's erstwhile leading game developers, Vince Zampella and Jason West. Zampella and West had sold their game development studio to Activision in 2003. They stayed on at Activision and inter alia created the Call of Duty series of games, which resulted in over $3 billion dollars in sales and a ranking as the seventh best-selling video game franchise ever. Indeed, the most recent edition "Call of Duty: Modern Warfare 2"), launched in November 2009, enjoyed sales over $500 million in only the first five post-release days.

But not all was well behind the scenes. On March 1 Kotick fired the two developers, alleging that an internal investigation revealed that the pair had engaged secret unauthorized contacts with a rival. The developers then sued, claiming that the internal investigation and firing were an excuse for the company to avoid paying them royalties in respect of the most recent game. They also groused that the company had changed the product climate whereby "quantity" was preferred over "quality." Kotick filed a countersuit, alleging insubordination, witholding the payment of bonuses to turn employees against the company, and a meeting with an unnamed competitor. During this flurry of legal measures, the two developers joined Electronic Arts, the second largest video game publisher and a major competitor of Activision.

While the legal struggle itself might be the stuff for creating a new video game for the over-40 crowd, the more interesting point is what the dispute suggests about the role of the star in the video games business. The article puts it this way: " The Call of Duty clash is a sign of the 'rise and power of the elite devoloper', says Evan Wilson, an analyst .... The shift in clout makes the game industry more like films and books, where creators maintain more control over their intellectual property. The creative types are getting more leverage because of the rising cost of games ..."

Find the Video Game Star

I wonder, however, how accurate is this observation about the ascendency of the video game developer. If we think about the movie business, the "actor as star" has always had a central role in that business (whether they were contractually tied to studios in previous times or free to go wherever they want today). In addition, the movie business also has to contend with the financial types who drive most deals, the content creators, both the studio and individual creators themselves, the producer, the director, and the marketing and distribution network for promoting and screening the film (we mercifully pass over the online aspects of the industry). In such an ecosystem, I find it to difficult to locate the parallel between these various loci of power in the movie business and the alleged power of developers in the video game business.

As for the book business, the parallel between it and the video game industry is also uncertain. In book publishing, the central creative actor is the authoress, supported by her publisher, which takes on the job of promoting and distributing the book. Quite simply, unless I am mistaken, most purchasers of video games do not rely on the identify of the game developer in making the decision to purchase. Compare that with an established author like Dan Brown or John Grisham, whose moniker alone on a book will attract sales.

It seems, therefore, that neither the film nor the publishing business provides a compellingly helpful analogy to the video games industry. That said, there may be a potential connection between star developers and their commercial impact on the video game business.

Consider the quote in the article from analyst Colin Sebastian: "Most gamers don't care that much" about the identify of the designers. Rather, "[w]hat they do care about is the quality of the game. And that is why there is a lot of pressure on Activision." Kotick retorts as follows: "It's not about a single individual or one or two guys. Our commitment to quality hasn't changed. If you want to make great games and be handsomely compensated, then the best game to work on is "Call to Duty."

What "quality"means for for Sebastian or Kotick, and how quality is connected with star developers, is not, however, further explained. I would suggest the following. Sebastian seems to be taking the position that the quality of the video game, and the video game experience, is primarily driven from a small number of star developers who have the capability to translate creative contents into sucessful products. Contents and those who propel those contents, copyright if you wish, are central. This explains how, with the right star develops, one can continue to produce a stable of winning video game products.

For Kotick, at least as expressed in the quote, the role of the creator is subordinate. His emphais is on "the single best game", i.e., a winning brand that the article itself describes as a "franchise." The goal here is to maintain the supremacy of this brand. Just as with any successful brand, quality means that the product needs to continue to meet the expectations of the customer. This need not require that product quality surpasses all that of all competitors, but only that it does not materially deviate from what has come to be expected from it in the marketplace. It is for that reason that the developers, while important, are not the primary driver. This position, while it expresses a credible strategy for maintaining one's s current brand position, does not however explain adequately how one gets to the next great video game brand.

The upshot is this. The current struggle between Kotick and his ex-developers highlights, but does not ultimately provide guidance, how a company in the video game business should harness both star creavity and ongoing brand development to ensure both its present and future.

Whooping for joy! Medeva's SPC applications book a trip to Luxembourg

Supplementary protection certificates (SPCs) for pharmaceutical patents don't get much column space on this weblog, mainly because it is a reputedly nerdish subject that only SPC addicts are interested in and, more importantly, because there is already a perfectly good weblog -- The SPC Blog -- to carry the latest developments in this undeniably recondite corner of IP. However, Medeva BV v Comptroller General of Patents [2010] EWCA Civ 700, an order of the Court of Appeal for England and Wales earlier this week, has had so many of the IPKat's readers jumping up and down with excitement that he really felt he should give it a mention.

In short, on 20 April 1990 [yes, it was a World Cup year -- and Germany beat England on penalties ...] Medeva applied for a patent for a method of making acellular vaccine compositions against whooping cough by combining two antigens, pertactin (69kDa protein) and filamentous haemagglutinin (FHA). This happy combination produced so synergistic an effect such that a third antigen, pertussis toxin (LPF) was not required. This patent expired in April 2010. One year ahead of expiry, Medeva filed five applications for SPCs. Three of these related to vaccines against whooping cough, diphtheria, tetanus, meningitis and polio; the other two covered just four, leaving out the vaccine against meningitis.

The hearing officer rejected all five applications. In the case of four, he concluded that the active ingredients included vaccines against diseases other than whooping cough, which were not protected by the original patent. In the case of the fifth, though the active ingredients were limited to those protected by Medeva's patent, the market authorisation covered a combination vaccine which included vaccines against the other four diseases. To put it another way, in the case of all five there was a mismatch between the active ingredients protected by the patent and the active ingredients in the vaccine or medicinal product for which the relevant market authorisations had been given.

Medeva appealed, arguing that the hearing officer had misconstrued the meaning of the words "product protected by a basic patent" in Article 3(a) of Regulation 469/2009 on SPCs for medicinal products. That term, said Medeva, covered any product which could be subject to successful proceedings for infringement of the patent ("the infringement test"). The appeal was dismissed by the Patents Court (see The SPC Blog here) and Medeva appealed further to the Court of Appeal.

The Court of Appeal, rightly sizing up the Regulation and identifying it as a can of worms, has now prudently referred a number of questions to the Court of Justice of the European Union, Luxembourg, for a preliminary ruling
On Article 3(a)

1. Regulation 469/2009 ... recognises amongst the other purposes identified in the recitals, the need for the grant of an SPC by each of the Member States of the Community to holders of national or European patents to be under the same conditions, as indicated in recitals 7 and 8. In the absence of Community harmonisation of patent law, what is meant in Article 3(a) of the Regulation by “the product is protected by a basic patent in force” and what are the criteria for deciding this?

2. In a case like the present one involving a medicinal product comprising more than one active ingredient, are there further or different criteria for determining whether or not “the product is protected by a basic patent” according to Article 3(a) of the Regulation and, if so, what are those further or different criteria?

3. In a case like the present one involving a multi-disease vaccine, are there further or different criteria for determining whether or not “the product is protected by a basic patent” according to Article 3(a) of the Regulation and, if so, what are those further or different criteria?

4. For the purposes of Article 3(a), is a multi-disease vaccine comprising multiple antigens “protected by a basic patent” if one antigen of the vaccine is “protected by the basic patent in force”?
5. For the purposes of Article 3(a), is a multi-disease vaccine comprising multiple antigens “protected by a basic patent” if all antigens directed against one disease are “protected by the basic patent in force”?

On Article 3(b)

6. Does the SPC Regulation and, in particular, Article 3(b), permit the grant of a Supplementary Protection Certificate for a single active ingredient or combination of active ingredients where:

(a) a basic patent in force protects the single active ingredient or combination of active ingredients within the meaning of Article 3(a) of the SPC Regulation; and

(b) a medicinal product containing the single active ingredient or combination of active ingredients together with one or more other active ingredients is the subject of a valid authorisation granted in accordance with Directive 2001/83/EC or 2001/82/EC which is the first marketing authorization that places the single active ingredient or combination of active ingredients on the market?
The sealed order of the Court of Appeal, kindly furnished to this Kat by Tom Mitcheson (3 New Square) and the effervescent Hayley Hill (Rouse), can be read here.

Whooping cough here
Whooping cough for cats here

Friday fantasies

A special bonus for visitors to the IPKat's Forthcoming Events list is that there are actually fewer events to check out than there were last week. This means less interruption to a work-week which is already under pressure from commitments to Wimbledon fortnight, meaningless little skirmishes between the Australian and English cricketers and the World Cup.

The European Patent Office is looking for middle-aged lawyers to staff its Boards of Appeal. According to this advertisement, candidates must have an excellent knowledge of one of the EPO's three official languages [four, says Merpel, if you include the somewhat robotic dialect of Legalese in which many Board decisions are drafted], and an ability to understand the other two.

Right: The EPO's HR department had an ideal candidate in mind, but were anguished at being unable to express the job spec in dull enough terms

Candidates should also have worked in the field of patent law, and have practical experience as judges, patent agents, or legal or technical advisers in public administration or industry. They should preferably be between 45 and 55 years of age, but they must act quickly: they have until only 30 June 2010 to apply and the advert doesn't say anything about getting an extension.

Why are cats more important than chocolate? Well, they may not be -- but the Australians, having given Cadbury's merry hell in their attempts to monopolise the colour purple in respect of their popular chocolate confectionery products (see earlier post on "Chocs Away!", here), have awarded the coveted status of registered trade mark to the manufacturers of Whiskas cat food in respect of a colour now known as 'Whiskas purple' [shouldn't that be 'purr-ple'?]. You can listen to the IPKat's valued friend Tim Golder (Allens Arthur Robinson) discussing this exciting development here [IPKat advisory: contains Australian accents ...].

Boyle's Law. Professor James Boyle (billed by the Open Rights Group as "the world's most influential copyright scholar") is set to deliver the keynote address at the UK's first ever digital rights conference, ORGCon, on 24 July. Says Boyle, who is described as being "famed for arguing that our current copyright laws are failing to reward artists and encourage creativity" -- an argument supported by establishment and rebels alike -- says:
"We have chosen to lock up the vast majority of the last century's culture, to make it inaccessible and in most cases, done so with no benefit to anyone.

"Why has legal freedom decreased at the moment that technological openness has flourished And what can we do to save the incredible shrinking public domain?"
The conference, ORGCon, is a low-cost conference where campaigners can find out about and take action in support of their digital rights. Other speakers confirmed for the conference include Tom Watson MP, "the vociferous critic of the Digital Economy Act" [not to be confused with Tom Watson the golfer, who may well be a bit tee'd off by digital economy issues for all we know], and the Canadian Craphound, activist and author Cory Doctorow.

Thursday, 24 June 2010

Breaking News: Google wins $1 billion summary judgment against Viacom and Premier League

Yesterday, Judge Louis Stanton of the Southern District of New York granted summary judgment for Google in two cases brought separately by Viacom and the Premier League. Judge Stanton held that general knowledge of copyright infringement, no matter how widespread and blatant, was not enough for YouTube not to benefit from the Safe Harbour provisions of the Digital Millennium Copyright Act. The IPKat sets out in detail the reasoning of the court in its brief 30-page (double-spaced, mind you) decision.

Readers will recall from various IPKat and AmeriKat reports (found here), that the complaints centered on the plaintiffs’ copyrighted content being uploaded onto YouTube by third-party users and YouTube, once notified, not doing enough to remove the infringing content or preventing future infringements. YouTube sailed into the DMCA’s Safe Harbour provisions which state that under Section 512(c)(1) a service provider:

“shall not be liable for monetary relief or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system if the provider:

(A) (i) – does not have actual knowledge that the material or activity using the material on the system or network is infringing; or

(ii) – is not aware of facts or circumstances from which infringing activity is apparent (the "red flag test"); or

(iii) – upon obtaining knowledge or awareness expeditiously removes it; AND

(B) – does not receive a financial benefit directly attributable to the infringing activity; AND

(C) – upon notification of claimed infringement it responds expeditiously to remove the material”

In December, Viacom wrote to Judge Stanton stating their intent to file a motion for summary judgment. In March of this year, around 200 pages of summary judgment motions from both parties were filed (see AmeriKat’s report on both motions here and here).

The question to be decided in the summary judgment was whether the statutory phrases under Section 512(c)(1)(A)(i) and (ii) meant that general awareness of infringements (which were claimed by the plaintiffs to be widespread and common), or actual or constructive knowledge of specific and identifiable infringements of individual items was required for a service provider to fall foul of the Safe Harbor provisions. To determine this question the court had delve into first the legislative history of the DMCA and then the case-law.

Legislative Consideration

Senate Judiciary and House Committee Reports were cited at length in Judge Stanton's decision. The Reports specified that Section 512 was intended to limit a service providers’ liability dependent on their “applicable knowledge”. At paragraphs 44-45/53-54 of the Reports, that knowledge standard was met either by actual knowledge or awareness of facts from which infringing activity is apparent. The Reports went on to state that Section 512(c)(1)(A)(ii) could be described as a “red flag test”. Such a test meant that a service provider “need not monitor its service or affirmatively seek facts indicating infringing activity” to benefit from the exception.

The red flag test was proposed to be a test of two halves: First, the test is one of subjectively determining whether the service provider was aware of the facts in question and then objectively determining if the infringing activity would have been apparent to a reasonable person operating under similar circumstances. The Reports go on to discuss the notification requirements, i.e., notice and take down procedure under the DMCA. The Reports state that the copyright owner “must provide information that is reasonably sufficient” and clear “to identify and locate the allegedly infringing material” to the service provider. If the notification is not sufficiently clear and does not comply with Section 512(c)(3), then the service provider may benefit from the limited liability of the Safe Harbor. The Reports repeatedly emphasized the need of the copyright owner to specify the infringing material and activity. As such Judge Stanton held that the sections 512(c)(1)(A)(i) and (ii) meant that the knowledge that a service provider must have to foul foul of the Safe Harbor is

“knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough. That is consistent with an area of the law devoted to protection of distinctive individual works, not libraries. To let knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA.”

Judge Stanton said that this standard of knowledge was consistent with the Perfect 10 case which placed the burden of indentifying copyright infringement under the DMCA on the copyright owner, not the service provider. Further, he stated, that the DMCA itself explicitly states at Section 512(m)(1) that the Act should not be construed to condition the enjoyment of a “safe harbour” on a “service provider monitoring its service or affirmatively seeking facts indicating infringing activity”. To illustrate the apparent efficiency of the DMCA notification procedure Judge Stanton stated that when Viacom sent a notice to YouTube about 100,000 infringing videos, YouTube had removed almost all of them the next day.

Case-Law Consideration

Turning to case-law, Judge Stanton cited UMG Recordings v Veoh (2009) which concluded that “if investigation of ‘facts and circumstances’ is required to identify material as infringing, then those facts and circumstances are not ‘red flags’.” This was a further reason why Judge Stanton held that “awareness of pervasive copyright infringing, however flagrant and blatant, do not impose liability on the service provider.”

Interestingly, Judge Stanton went on to cite Tiffany v eBay (2010) (first a summary judgment trade mark case later confirmed by the Court of Appeals) by stating in that case Judge Sullivan held that such generalized knowledge possessed by eBay that some portion of Tiffany goods being sold on its website might be counterfeit was insufficient to impose upon eBay an affirmative duty to remedy the problem. Judge Sullivan held that eBay would have to have knowledge of specific instances of actual infringement to be held contributory liable. As readers may recall, the Court of Appeals agreed. Practitioners will find it interesting, if not useful, that the court was prepared to use trade mark cases to inform the requisite knowledge required in a DMCA case.

Just over two sides of the judgment were devoted to the discussion of the Grokster case (MGM v Grokster, 2005) - a case that was heavily relied upon by Viacom in their summary judgement - and its ‘progeny’ - Arista Records v Usenet (2009), Columbia Pictures v Fung (2009), and Arista Records v Lime Group LLC (2010). The Grokster Court had held that one is liable for the consequent acts of third-party infringement if they “distribute a device with the object of promoting its use to infringe copyright”. YouTube had said that they did not exist “solely to provide the site and facilities for copyright infringement.” [Note YouTube’s use of the word ‘solely’, a word that did not appear in Grokster, as far as this Kat is aware]. Judge Stanton went only so far as to state that Grokster-type cases were not ones of a service provider who furnishes a platform for users to post and access materials, of which the service provider is unaware. The facts of these cases were different. Therefore, he indicated that the Grokster cases were of little relevance in relation to application of the DMCA provisions.

Other Considerations

Judge Stanton went on to consider the plaintiffs’ claim that the display of videos on YouTube fell outside the DMCA protection as it was not “storage” of the material. Judge Stanton held that this construed the term “storage” too narrowly, especially in light of the definition of “service provider” in Section 512(k)(1)(B). This definition included “an entity offering the transmission, routing, or providing of connections for digital online communications.” This was supported by the Veoh case which held that the transmission of online communications was included in the term “storage”.

Another argument advanced by the plaintiffs was that YouTube could not benefit from the Safe Harbor because they financially benefited (picture, right - Viacom's view of YouTube?) from the infringing material being uploaded on the site. Readers may recall that during the mud-slinging of late last year and earlier this year, the disclosure documents alluded to YouTube/Google actively uploading infringing content to YouTube to increase site traffic themselves and doing nothing about infringing material once there. Judge Stanton referred back to the knowledge criteria and stated that under Section 512(C)(1)(B) a service provider must not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity...”. Judge Stanton held that the “right and ability to control” the activity requires item-specific knowledge of it. Therefore, he held that without such specific knowledge, YouTube did not fall foul of this section.

The final two pages of Judge Stanton’s judgment was a hodgepodge of how YouTube’s conduct in respect of terminating user accounts after receiving two DMCA notices, not removing similar infringing material as set out in a DMCA notice and other apparently virtuous activities was reasonable and did not restrict their enjoyment of the Safe Harbor.

What's Next?

The IPKat is incredibly impressed with what a glowing report this summary judgment seems to have been for YouTube and Google’s activities. Google and YouTube are obviously delighted. Via their official Blog they have stated that:

"This is an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences with each other. We’re excited about this decision and look forward to renewing our focus on supporting the incredible variety of ideas and expression that billions of people post and watch on YouTube every day around the world."
Considering the mass of documents that Viacom had disclosed which seemingly evidenced YouTube’s own uploading of infringing content, the IPKat wonders why little hay was made of these documents. Unfortunately, several of the discovery documents in the case were redacted, so one wonders if this alleged smoking gun may not have been the pistol Viacom wanted it to be. The IPKat especially finds this interesting because Judge Stanton specifically distinguished the case of Fung, where the defendant was an admitted copyright thief, with this case. Google, whose overworked PR machine has managed to keep a somewhat squeakily clean image (picture, left - a product that Google perhaps may be using?) in never knowingly promoting copyright infringement on their website obviously helped in this determination.

In any event, this case is not over. It would be unrealistic for Viacom to relinquish the fight after presumingly millions in legal fees and the vested interests of many copyright conglomerates at stake. According to this report, Viacom are set to appeal the summary judgment.

So following this decision, the take home lesson for copyright owners wanting to get infringing material off YouTube or any other service provider's site is to draft your DMCA notice with a high degree of specificity and to actively police websites for your copyright works. For service providers, know nothing - but once you do, act fast.

Judge Stanton's summary judgment found here.

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